'Economic damage' predicted after city levies big tax on hi-tech firms

Tuesday, November 13, 2018
 | 
Chris Woodward (OneNewsNow.com)

homeless manVoters in San Francisco last week approved a new plan to combat homelessness, but one observer thinks they may come to regret the decision.

A city-wide ballot measure known as "Proposition C" – which passed last Tuesday – calls for a tax on big tech companies based in San Francisco. According to CNN, the annual tax would be anywhere from 0.175 percent to 0.69 percent on companies with gross receipts more than $50 million.

"We know that housing solves homelessness," says the Yes on C website. "50% of Prop C's funding will pay for construction, rehab, prevention and operating subsidies of approximately 4,000 units of housing over the next eight years and mandates that families and youth are given priority. Our goal is to house all who are currently experiencing long-term or chronic homelessness, are sick, are youth, and families with children."

While the head of software company Salesforce – along with a who's who of Democratic Party leaders and left-leaning special-interest groups – did endorse the plan, it has its critics, including Jack Dorsey, the CEO of Twitter, and San Francisco Mayor London Breed. Patrice Lee Onwuka with the Independent Women's Forum joins the latter group.

Onwuka

"I don't think the ballot measure was a good move and that voters necessarily understood the economic damage that would be caused if it passed," Onwuka tells OneNewsNow. "I think if they really understood that the loss of jobs [and] businesses could far outweigh what would be taken in in revenue, they would probably think again. And some pre-polling indicates that if they understood that, the support for the measure actually dropped pretty substantially."

The vote in San Francisco follows a failed effort by the city of Seattle to tax big tech companies to combat homelessness. Onwuka says it wouldn't surprise her to see other cities try to follow San Francisco's lead.

"Tech firms that are new and generating a lot of income will become easy targets, but when they recognize that these tech companies can very easily move their headquarters to other areas, even a few miles outside the same city jurisdiction, the tradeoffs may not be worth it," she continues.

"Even the mayor of San Francisco opposed this ballot measure because while she recognized that fighting homeless is important (1) there is no accountability for how the city already uses the funds that it raises, and (2) that economic loss, those unintended consequences of job losses and of these companies uprooting and moving their headquarters would far outweigh what this ballot measure could potentially earn in terms of bringing in new revenue."

Prop. C passed with nearly 60 percent of the vote on November 6.

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